LONDON, Feb 8: Platinum drifted lower on Friday after trading just below historic highs, but analysts said persistent supply concerns in top producer South Africa would propel the metal to new peaks in the coming weeks.

Other precious metals advanced on bullish market sentiment,with gold rising towards its historic high of $936.50 an ounce and palladium matching Wednesday’s six-year peak.

Spot platinum rose as high as $1,848 an ounce before falling to $1,835/1,843 at 1126 GMT, against $1,841/1,846 late in New York on Thursday when it hit a record high of $1,850.

The platinum market seems very nervous. The situation might normalise in the sense that there won’t be any major mine stoppages because electricity is cut completely, but we are unlikely to see mines getting 100 per cent electricity supply,” said Johannesburg-based Walter De Wet, analyst at Standard Bank.

Platinum producers in the country, which accounts for about 80 per cent of the world’s output, halted mining operations for five days in January with a significant loss of production.

The supply/demand outlook remains very positive for platinum as there is no quick fix for the supply-side problems, while the bulk of demand is price-inelastic and inventories sit at historically low levels, Barclays Capital said.

Even though investor sentiment is likely to remain positive, in our view, it is the metal’s fundamentals and not funds that will drive prices to new highs, it said in a note.

Gold continued to trade above $900 on positive sentiment, with supply problems and plans by some producers to cut their hedging positions underpinning the market.

Spot gold rose as high as $916.50 and was last quoted at $912.70/913.60 an ounce, against $908.80/909.50 in New York.

US gold futures advanced gained, with the April contract trading up $7.1 at $917.10 from the New York settlement.

Silver rose more than 1 per cent to $16.96/17.01 an ounce from $16.74/16.79 in New York, while palladium rose as high as $429 an ounce before easing to $428/433, still uo $7 from its close in the US market.—Reuters